iShares MSCI Brazil ETF (EWZ) is an exchange-traded fund that seeks to provide investment results that correspond to the performance of the MSCI Brazil 25/50 Index. The ETF invests in mid and large cap companies in Brazil representing 85% of the Brazilian stock market. Financials stocks account for 29% of the fund’s holdings followed by Materials (16%), Energy (12%), Consumer Staples (11%) and Consumer Discretionary (10%) stocks. The fund’s total assets amount to USD 4.4 bn. The fund’s top-10 constituents include: Investment thesis Investors have fled from Brazilian stocks and its currency this year as the Covid-19 pandemic battered the economy and worsened the nation’s already-fragile fiscal outlook. Assets have been further undermined by political turbulence and a lack of confidence in President Jair Bolsonaro as he downplays the coronavirus threat even as Brazil has become the world’s hotspot for new infections. Analysts of Bloomberg Intelligence (BI), meanwhile, see some factors that can play in favor of Brazilian stocks. Brazil stocks down to Earth Brazilian stocks have buckled under the weight of the country's Covid-19 response, political dysfunction and currency, but valuations and sector composition have increasing support relative to other emerging markets. At 1.5x book value, the MSCI Brazil Index is far from its December peak of 2.4x, and 0.4 standard deviations below the average since 2000, reflecting the nation's macroeconomic challenges. So, valuations seem to reflect a fair amount of the bad news, especially considering the weak Brazilian real. Earnings estimates look rather optimistic Unlike most other world markets where year-ahead earnings expectations have turned for the worse, Brazil's remain surprisingly positive, despite a heavy concentration in cyclicals. Ibovespa companies are forecast to report a median 4.3% EPS increase, led by staples (26%), health care (13.1%), industrials (9.6%) and discretionary (8.6%). Cielo, the sole technology company, is forecast for the steepest decline (34.3%), followed by energy (19%), real estate (13.6%) and communications (11.9%). Cyclical-sector tilt may turn to Brazil's favor Sector composition has been Brazil's downfall this year, but that may reverse. Energy and materials have been two of the worst-performing groups in emerging markets, and the Ibovespa is 1,600 bps overweight to the MSCI Emerging Markets Index because of Petrobras and Vale. Communication services and IT are the best performers, with the Ibovespa 2,800 bps below those sectors' MSCI EM weighting. BI analysts’ constructive stance on pro-cyclical global sectors such as energy and materials, in conjunction with more sanguine bottom-up views on Petrobras and Vale, support their take that sector composition could finally play to Brazil's advantage. To summarize, down more than 48% this year when measured in dollars, Brazilian stocks, BI analysts believe, should benefit from growing appetite for risky assets and a recovery in commodities prices during the second half of 2020. In SPC analysts view, shares of iShares MSCI Brazil ETF offer an interesting investment opportunity as a bet on Brazilian equities rebound. The fund’s advantages include relatively high liquidity, a moderate expense ratio of 0.59% as well as a decent annualized dividend yield of nearly 1%. $EWZ, iShares Inc iShares MSCI Brazil ETF / H1